Joseph Philip, Cochin V. ITO, Ernakulam

ITA 204/COCH/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52317 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 12-03-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIJAYAPRABHA
• Assessee Lawyers: A S NARAYANAMURTHY
• Keywords: Document seized; Documents seized
• Section: 153A; 263

Judgement Text

1 ITA NOS 199 TO 204/COCH/2010 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S.GANESAN (JM) & SHRI SANJAY ARORA (AM) I.T.A.NO. 199, 200, 201, 202, 203 & 204 /COCH/20 1 0 (ASSESSMENT YEARS 2000-01, 2001-02, 2002-03, 2003-0 4, 2004-05 & 2005-06) SHRI JOSEPH PHILIP RECCA ENCLAVE PADAMUGAL, VAZHAKKALA KOCHI-30 VS. ITO, WD. 2(1) , ERNAKULAM (APPELLANT) (RESPONDENT) APPELLANT BY SHRI A.S. NARAYANAMURTHY RESPONDENT BY MS VIJAYAPRABHA DATE OF HEARING 12 - 1 2 - 2011 DATE OF PRONOUNCEMENT 2 2 - 12 - 2011 O R D E R PER N.R.S. GANESAN (JM) ALL THE SIX APPEALS OF THE ASSESSEE ARE DIRECTED A GAINST THE COMMON ORDER PASSED BY THE ADMINISTRATIVE COMMISSIO NER IN EXERCISE OF HIS REVISIONAL JURISDICTION U/S 263 OF THE INCOM E-TAX ACT, 1961 FOR THE ASSESSMENT YEARS 2000-01 TO 2005-06. THEREFORE , ALL THESE 2 ITA NOS 199 TO 204/COCH/2010 APPEALS WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER. 2. SHRI A.S. NARAYANAMURTHY, THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS MANAGING PA RTNER OF SKYLINE BUILDERS. THERE WAS A SEARCH IN THE PREMISES OF TH E FIRM AND THE ASSESSMENTS WERE COMPLETED U/S 153C OF THE ACT ON 1 7-12-2007 ACCEPTING THE RETURNS FILED BY THE ASSESSEE. ACCOR DING TO THE LD.REPRESENTATIVE, THE ASSESSEE HAS FILED ALL THE D OCUMENTS BEFORE THE ASSESSING OFFICER AND THE ASSESSING OFFICER, AFTER CONSIDERING ALL THE MATERIALS AND VERIFICATION OF THE DETAILS FILED BY THE ASSESSEE HAS COMPLETED THE ASSESSMENTS WHICH IS EVIDENT FROM THE ORDERS AS PASSED BY THE ASSESSING OFFICER U/S 153C OF THE ACT. HOWEV ER, THE ADMINISTRATIVE COMMISSIONER IN EXERCISE OF HIS REVI SIONAL JURISDICTION FOUND THAT THE ASSESSING OFFICER HAS NOT MADE ANY V ERIFICATION IN RESPECT OF RECEIPTS MENTIONED IN THE SEIZED DOCUMEN TS MARKED AS PLP-A-13 WHILE COMPLETING THE ASSESSMENTS. ACCOR DING TO THE LD.REPRESENTATIVE, THE COMMISSIONER HIMSELF FOUND T HAT THE RECORDS DO NOT INDICATE THAT ANY AMOUNT WAS EITHER PAID BY THE FIRM OR RECEIVED BY THE ASSESSEE. REFERRING TO THE PAPER BOOK, THE LD.REPRESENTATIVE SUBMITTED THAT NO PAYMENT WAS RECEIVED BY THE ASSES SEE FROM THE FIRM. THE FLAT WHICH WAS MENTIONED IN THE SEIZED D OCUMENT WAS SOLD TO THIRD PARTY. THE COPY OF THE REGISTERED SALE DE ED IS AVAILABLE AT PAGE 83 OF THE PAPER BOOK. ACCORDING TO THE LD.REP RESENTATIVE, THE ASSESSEE HAS PLACED ALL THE MATERIAL ASPECT AND THE RELEVANT 3 ITA NOS 199 TO 204/COCH/2010 DOCUMENTS BEFORE THE ASSESSING OFFICER FOR CONSIDER ATION. THE ASSESSING OFFICER, AFTER CONSIDERING ALL THE DETAIL S, DOCUMENTS AND MATERIALS PLACED BEFORE HIM DID NOT RECORD REASONS FOR ACCEPTING THE RETURNS OF THE ASSESSEE. ACCORDING TO THE LD.REPRE SENTATIVE, THE ASSESSEE HAS NO CONTROL OVER THE ASSESSING OFFICER AND IT IS UPTO THE ASSESSING OFFICER TO RECORD REASONS. MERELY BECAUS E IT WAS NOT EXPRESSLY MENTIONED IN THE ASSESSMENT ORDER ABOUT T HE CONSIDERATION OF THE SEIZED DOCUMENTS MARKED AS PLP-A-13, IT DO ES NOT MEAN THAT IT WAS NOT CONSIDERED. THEREFORE, ACCORDING TO THE LD.REPRESENTATIVE, THERE IS NO ERROR IN THE ASSESSMENT ORDER AND NO PR EJUDICE IS CAUSED TO THE REVENUE. 3. ON THE CONTRARY, MS. VIJAYAPRABHA, THE LD.DR SUB MITTED THAT THE SEIZED MATERIAL MARKED AS PLP-A-13 SHOWS CERTAIN RECEIPTS BY THE ASSESSEE. THE ASSESSING OFFICER HAS NOT VERIFIED T HE RECEIPTS MENTIONED IN THE SEIZED DOCUMENT. SINCE NO VERIFIC ATION WAS MADE, THE COMMISSIONER OF INCOME-TAX FOUND THAT THE ASSES SING OFFICER IS INCUMBENT TO INVESTIGATE THE FACTS STATED IN THE RE TURN OF INCOME AND THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPER ATION. SINCE SUCH AN ENQUIRY WAS NOT MADE, THE COMMISSIONER OF INCOME -TAX FOUND THAT THE ORDER OF ASSESSMENT IS ERRONEOUS AND PREJUDICIA L TO THE INTEREST OF THE REVENUE. ACCORDINGLY, THE COMMISSIONER OF INCO ME-TAX DIRECTED THE ASSESSING OFFICER TO REDO THE ASSESSMENT AS PER LAW AFTER MAKING PROPER ENQUIRY. REFERRING TO THE JUDGMENT OF THE A PEX COURT IN THE 4 ITA NOS 199 TO 204/COCH/2010 CASE OF RAM PYARI DEVI SAROGI VS COMMISSIONER OF IN COME-TAX (1968) 67 ITR 84 (SC), THE LD.DR SUBMITTED THAT SINCE THE ASSESSING OFFICER HAS NOT MADE PROPER ENQUIRY WITH REGARD TO THE RECE IPTS FOUND IN THE SEIZED MATERIAL, THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE LD.DR HAS ALSO PL ACED HIS RELIANCE IN THE CASE OF COMMISSIONER OF INCOME-TAX VS MCMILLAN & CO (1958) 33 ITR 182. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND HAVE ALSO PERUSED THE MATERIAL PLACED BEFORE US. W E HAVE ALSO CAREFULLY GONE THROUGH THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER/S 153C R.W.S. 153A OF THE ACT. NO DOUBT, T HE ASSESSING OFFICER AT PARAGRAPH 2 OF HIS ORDER SAYS THAT HE DISCUSSED THE CASE WITH THE REPRESENTATIVE OF THE ASSESSEE AND HAS VERIFIED THE ASSETS AND LIABILITIES OF THE STATEMENTS FILED AND COMPLETED T HE ASSESSMENTS ACCEPTING THE RETURNS OF INCOME. THERE IS NO REFER ENCE ABOUT THE SEIZED MATERIAL WHICH WAS MARKED AS PLP-A-13 IN T HE ASSESSMENT ORDER. THE LD.REPRESENTATIVE FOR THE ASSESSEE TAKI NG US THROUGH THE PAPER BOOK FILED BY THE ASSESSEE BEFORE THE TRIBUNA L SUBMITTED THAT THERE WAS NO REFERENCE IN THE MATERIALS AVAILABLE O N RECORD TO SUGGEST THAT THE ASSESSEE HAS RECEIVED ANY MONEY FROM THE F IRM. THE FLAT WHICH IS SAID TO BE REFERRED IN THE SEIZED MATERIAL WAS ALSO SOLD TO THE THIRD PARTY AS PER THE COPY OF REGISTERED SALE DEED FILED BEFORE THIS TRIBUNAL. THE LD.REPRESENTATIVE CONTENDED THAT THE ASSESSEE HAS FILED 5 ITA NOS 199 TO 204/COCH/2010 ALL THE MATERIAL BEFORE THE ASSESSING AUTHORITY, TH EREFORE, IT IS FOR THE ASSESSING OFFICER TO EXAMINE AND RECORD HIS REASONI NG AND MERELY BECAUSE THE ASSESSING OFFICER DID NOT RECORD THE RE ASONS, THE ASSESSEE CANNOT BE FAULTED WITH. WE ARE UNABLE TO ACCEPT THE CONTENTIONS OF THE LD.REPRESENTATIVE FOR THE ASSESSEE. THE PROCEEDING S BEFORE THE ASSESSING OFFICER ARE QUASI JUDICIAL PROCEEDINGS. THE ORDER PASSED BY THE ASSESSING OFFICER IS SUBJECT TO FURTHER APPEAL BEFORE THE APPELLATE AUTHORITY AND IS ALSO SUBJECT TO REVISION U/S 263 O F THE INCOME-TAX ACT. THEREFORE, UNLESS AND UNTIL THE ASSESSING OFFICER R ECORDS REASON FOR COMING TO THE CONCLUSION, THE APPELLATE AUTHORITY / REVISIONAL AUTHORITY MAY NOT BE ABLE TO APPRECIATE THE FINDINGS OF THE A SSESSING OFFICER. IN OTHER WORDS, THE APPELLATE / REVISIONAL AUTHORITY H AS TO APPRECIATE THE FINDING ONLY ON THE BASIS OF THE REASONS RECORDED B Y THE ASSESSING OFFICER. THEREFORE, THE REASONS RECORDED BY THE AS SESSING OFFICER HAVE TO BE EXPRESSLY MENTIONED IN THE ASSESSMENT ORDER. IF THE ASSESSING OFFICER IS ALLOWED TO SIMPLY SAY THAT HE ACCEPTED T HE RETURN AFTER PROPER ENQUIRY, THEN THE REVISIONAL / APPELLATE JUR ISDICTION PROVIDED UNDER THE ACT WOULD BE INEFFECTIVE. THE INCOME-TAX ACT CLEARLY PROVIDES FOR FILING OF APPEAL / REVISION BEFORE THE RESPECTIVE AUTHORITIES. FURTHER APPEAL IS ALSO PROVIDED BEFORE THIS TRIBUNA L AND THE HIGH COURT AS ALSO BEFORE THE SUPREME COURT. THEREFORE, THE A SSESSING OFFICER IS INCUMBENT UPON TO MAKE PROPER VERIFICATION AND RECO RD THE REASONS FOR ACCEPTING OR OTHERWISE OF THE RETURN OF THE ASSESSE E. THE REASON SHALL BE EXPRESSLY STATED IN THE ASSESSMENT ORDER. IN TH IS CASE, APPARENTLY, 6 ITA NOS 199 TO 204/COCH/2010 THE ASSESSING OFFICER HAS NOT MADE ANY ENQUIRY WITH REGARD TO SEIZED MATERIAL MARKED AS PLP-A-13. MOREOVER, NO REASON ING WAS GIVEN FOR ACCEPTING THE RETURN OF THE ASSESSEE IGNORING THE M ATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION. THIS VIEW OF OURS IS FORTIFIED BY THE JUDGMENT OF THE APEX COURT IN TOYOTA MOTORS VS COMMISSIONER OF INCOME-TAX (2008) 306 ITR 52 (SC). A SIMILAR VIEW WAS ALSO TAKEN BY THE APEX COURT IN MALABAR INDUSTRIAL CO LTD VS COMM ISSIONER OF INCOME-TAX (2000) 243 ITR 83 (SC). THEREFORE, WE D O NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY. ACC ORDINGLY, THE SAME IS CONFIRMED. 5. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND DECEMBER, 2011 SD/- SD/- (SANJAY ARORA) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER ERNAKULAM, DT : 22 ND DECEMBER, 2011 PK/ COPY FORWARDED TO: 1. JOSEPH PHILIP, RECCA ENCLAVE, PADAMUGAL, VAZHAKKALA , KOCHI-30 2. ITO, WD.2(1), ERNAKULAM 3. THE COMMISSIONER OF INCOME-TAX, KOCHI 4. THE DR (TRUE COPY) BY ORDER ASSTT.REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL , COCHIN